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The Morning Risk Report: Alstom, BNP Paribas Executives Discuss Compliance Comebacks
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Barbara Petitti, an ethics and compliance officer for policy enforcement and investigations for Alstom SA, spoke at a panel hosted by The Wall Street Journal and Dow Jones Risk & Compliance in New York on Tuesday. PHOTO: JOHNNY MILANO FOR THE WALL STREET JOURNAL
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Good morning. Alstom and BNP Paribas, two of France’s most recognizable companies, have something in common: They both faced record-breaking fines from the U.S. government.
Putting their compliance programs in order following their respective settlements in 2014 wasn’t easy, according to two top compliance officers who spoke at a panel hosted by The Wall Street Journal and Dow Jones Risk & Compliance in New York on Tuesday.
[Continued below...]
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Barbara Petitti, a Washington-based compliance officer for Alstom, said the French transportation company knew it was making progress toward instilling the right culture when its business units began engaging sooner—and more often—with their compliance colleagues. “The different functional areas are much more educated about the policies and procedures, so when they do come to us, their questions are much more advanced,” she said.
BNP Paribas, meanwhile, has made structural changes to its compliance divisions, including by establishing compliance as an independent function that reports directly to the chief executive, said Eric Young, chief compliance officer for BNP Paribas Americas.
Alstom agreed to pay $772 million in a settlement over foreign bribery violations with the U.S. Justice Department—in what at the time was the largest criminal fine ever levied under the Foreign Corrupt Practices Act. BNP Paribas agreed to pay nearly $9 billion to U.S. federal and state authorities for violating U.S. economic sanctions. The bank’s penalties included the largest-ever settlement—more than $963 million—with U.S. Treasury Department’s Office of Foreign Assets Control.
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From Risk & Compliance Journal
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U.S. Sanctions Compliance Weighs on Nonfinancial Companies
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Global companies are investing more heavily in sanctions compliance, hiring staff and training existing employees, as the U.S. expands its use of sanctions and trade restrictions to achieve foreign policy goals.
One of the biggest shifts affecting compliance officers has been the expansion of U.S. sanctions to nonfinancial sectors, such as shipping and manufacturing, Elizabeth Rosenberg, a sanctions-policy adviser at the U.S. Treasury Department during the Obama administration, said Tuesday during an event in New York hosted by The Wall Street Journal and Dow Jones Risk & Compliance.
Compared with financial institutions, which have well-established sanctions compliance programs, many nonfinancial companies have fewer controls in place, said Ms. Rosenberg, who is now a senior fellow at the Center for a New American Security in Washington.
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DoorDash earlier this year said it would change its tipping policy. PHOTO: JASON HENRY FOR THE WALL STREET JOURNAL
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The attorney general of Washington, D.C., is suing food-delivery company DoorDash for pocketing tips on deliveries, the attorney general’s office said Tuesday. DoorDash previously guaranteed workers a minimum amount for each delivery. When customers electronically added a tip to their total bill, the company put that payment toward the guaranteed minimum the worker receives, rather than increasing the payment by the amount of the tip.
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A U.S. appeals court shielded General Motors from punitive damages stemming from alleged misconduct from before the auto maker’s 2009 bankruptcy, limiting its liability for faulty ignition switches linked to more than 100 deaths. The new company that emerged from GM’s government-brokered bankruptcy a decade ago can’t be liable for punitive damages based on actions taken by its corporate predecessor, according to the U.S. Court of Appeals for the Second Circuit in New York.
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Fidelity Investments’ digital-currency business won state regulatory approval to operate in New York, a step expected to help the financial firm recruit new clients to its fledgling platform for storing and trading bitcoin. New York’s Department of Financial Services said Tuesday it had granted Fidelity Digital Asset Services LLC a trust-company charter, authorizing the business to offer custody and trading services to institutional and individual investors.
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Fannie Mae and Freddie Mac’s federal regulator kicked off a process for the mortgage-finance companies to raise enough capital for them to return to private ownership. The Tuesday announcement by the Federal Housing Finance Agency is a sign it thinks the companies likely need more than $180 billion in capital previously envisioned by the agency in 2018. At present, Fannie currently holds $6.4 billion in capital and Freddie holds $4.8 billion, according to the FHFA, far less than what they will need to eventually exit government control.
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Purdue Pharma has convinced 24 states and the District of Columbia to comply with a bankruptcy court injunction halting opioid lawsuits against the company and the controlling Sackler family at least temporarily, Purdue’s lawyer said at a bankruptcy hearing. Purdue filed for bankruptcy in September in the face of an avalanche of lawsuits over the opioid epidemic.
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Aluminum ingots were stacked at a stockyard in Wuxi, China, last May. The U.S. and China remain divided over core issues more than a month after the White House announced an ‘agreement in principle’ for a narrow trade agreement. PHOTO: QILAI SHEN/BLOOMBERG NEWS
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Trade talks between the U.S. and China are in danger of hitting an impasse, threatening to derail the Trump administration’s plan for a limited “phase-one” pact this year, according to former administration officials and others following the talks.
Both sides remain divided over core issues—including Beijing’s demand for removing tariffs and the U.S.’s insistence on China buying farm products—more than six weeks after an “agreement in principle” was announced by the White House on Oct. 11.
“China is going to have to make a deal that I like,” President Trump said Tuesday at a cabinet meeting. “If we don’t make a deal with China, I’ll just raise the tariffs even higher.”
Mr. Trump is facing pressure from people within and close to the administration who blame the lack of progress on what they describe as Beijing’s refusal to follow through on commitments at the bargaining table.
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Macy’s Inc. said it has notified customers affected by a data breach in October and offered them consumer-protection services at no cost. PHOTO: RICHARD B. LEVINE/ZUMA PRESS
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Macy’s said customer data may have been stolen from its website over a roughly one-week period in October. In an email statement, Macy’s said a “targeted data security incident” related to its macys.com website affected a small number of customers. The Cincinnati-based department-store operator said it has notified the affected customers and offered them consumer-protection services at no cost.
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Citing a lack of “coherent national strategy,” a bipartisan coalition of senators is pressing the Trump administration to create a new White House position to coordinate policy on 5G wireless technology. In a letter to Robert O’Brien, President Trump’s national security adviser, the Republican and Democratic leadership of four Senate committees called for the designation of a “senior individual focused solely on coordinating and leading the nation’s effort to develop and deploy future telecommunications technologies.”
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“I believe this is momentum,” said Stan Deal, Boeing’s commercial airplanes chief. PHOTO: LINDSEY WASSON/REUTERS
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Boeing has secured more deals for its grounded 737 MAX, a timely endorsement as the plane maker seeks regulatory approval for returning the aircraft to service. The MAX deals, happening at the biennial Dubai Air Show, broke a five-month order drought for the plane, which has been grounded world-wide since March following its second fatal crash. Kazakhstan’s Air Astana agreed on Tuesday to buy 30 MAX jets, and an undisclosed customer signed up for another 20.
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An international network of financial watchdogs has suspended the Vatican’s access to its information, dealing a major blow to the Vatican’s financial credibility under Pope Francis. The Egmont Group, a Toronto-based network of more than 160 national financial intelligence units around the world, has decided to suspend the Vatican watchdog from access to its secure web system, through which members share information about money laundering, financing of terrorism, tax fraud and other financial crimes, according to people familiar with the matter.
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